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On January 1 of the current year, a company had the following securities in its capital structure: Common stock: 1,000,000 shares authorized; 200,000 shares issued
On January 1 of the current year, a company had the following securities in its capital structure:
- Common stock: 1,000,000 shares authorized; 200,000 shares issued and outstanding.
- Preferred stock: 20,000 shares of 9%, $100 par noncumulative, convertible preferred stock issued and outstanding. Each preferred share is convertible into 10 common shares.
- Incentive stock options: Options exercisable to purchase 12,000 common shares for $10 per share. All options were outstanding at the beginning and end of the year.
Additional information:
- Net income for the year was $450,000.
- The income tax rate was 25%.
- During the year, the company declared and paid the standard dividend on the preferred stock.
- During the year, the average market price of the company's common stock was $12 per share.
| a. | What is the numerator of Basic EPS for the year? | ["$450,000", "$270,000", "$337,500", "$180,000"] |
| b. | What is the denominator of Basic EPS for the year? | ["200,000", "220,000", "212,000", "1,200,000", "1,000,000"] |
| c. | What is the numerator of Diluted EPS for the year? | ["$630,000", "$270,000", "$405,000", "$180,000", "$450,000"] |
| d. | What is the denominator of Diluted EPS for the year? Chosse ["400,000", "390,000", "200,000", "202,000", "402,000"] |
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Intermediate Accounting
Authors: J. David Spiceland, James Sepe, Mark Nelson
6th edition
978-0077400163
